E-mail is ubiquitous. It is an undeniably effective method to conduct business communications.

Obviously, when compared to traditional direct mail, the expense of e-mail messages is pennies on the dollar due to the high cost of print, postage and other production factors. More notably, the objective effectiveness of e-mail – as measured by actual sales or conversions – stacks up favorably against direct mail campaigns costing 20 times as much.

This suggests that e-mail marketers can actually afford to invest “extra” in their projects – perhaps extra in copywriting, content, design or list development, and still come out with a project that costs less than a typical direct mail effort while yielding potentially greater results.

Newsletters and Customer Retention

Research shows that customer retention may be the highest and best objective of e-mail marketing. E-mail can still be used as a prospecting tool or as a means of acquiring new customers. However, it is most effective as a means of staying in touch with contacts who have already purchased, or who know something about your product or service from other communications and may be interested in knowing more, especially when the time is right for them to buy.

An e-mail newsletter or report can be an ideal leave-behind for a sales call that does not result in a sale or defined next step. It can also be the “purpose” of a call in which the objective is to make a brief introduction and offer something of value in exchange for gathering more detailed contact information.

What’s so important about customer retention? Without it, your company’s profitability will be impossible to sustain. Everyone knows the cost of customer acquisition is high. Profitability comes with customers who buy a second, third and fourth time, and better yet, provide references and testimonials that send other new customers your way. Customer retention is a key indicator of the health of your business, and e-mail provides an effective tool to maintain and improve it.

It all boils down to building a relationship with your audience. With a relationship comes credibility, with credibility, trust, and with trust, when the time is right, a sale. One of the rules we live by is that people buy from people they trust. And you can’t establish trust without establishing a relationship first.

A final point on retention: recent data from the Direct Marketing Association underscores the effectiveness of e-mail as a customer retention tool. One survey found that e-mail had been used and found effective for customer retention by a higher percentage of marketing executives than any other online or offline medium. A close second was catalog marketing.

Compare the cost and complexity of an e-mail campaign with a catalog campaign and the conclusions are obvious: Can any organization afford not to consider e-mail marketing?